The Zombie Mortgages Stalking American Homeowners

The Journal.

The Wall Street Journal

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🗓️ 23 June 2023

⏱️ 15 minutes

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Summary

Long-dormant mortgages are coming back to bite. Homeowners around the country are facing large bills and even foreclosure threats from investors who own their second mortgages, often made more than a decade ago. We talk to WSJ’s Ben Eisen and a homeowner about why these seemingly dead mortgages are now coming back to life. Further Reading: - Zombie Mortgages Could Force Some Homeowners Into Foreclosure Further Listening: - Investors are Buying Up Homes. Cincinnati is Pushing Back - The Downfall of a Real Estate Empire Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Well good morning, Harston. Good morning. How are you? I'm well. How are you? Oh just fine. Considering.
0:16.1	Yesterday I had a call with a man named Harston Jones. He's 62, recently retired and is based
0:22.8	in Atlanta, Georgia. He lives in a home he bought in 1998. It's a ranch style home, you know,
0:30.6	on about half acre. It's a very diverse community. It's very convenient to a lot of important areas
0:40.9	of Atlanta. Right and location, location, location, right? Like you have to choose the community that
0:46.8	you want to live in. Absolutely. I got lucky on that. Like a lot of people, Harston took out a
0:52.7	mortgage when he bought his home. A few years later, he got a second mortgage on the house. It was a
0:57.9	home equity line of credit for up to $50,000 and Harston used that money to renovate his property.
1:04.9	Some major repairs had to be done. All the windows had to be replaced. I needed to put a roof on the
1:11.5	house. I needed to fix the driveway. It's a pretty long driveway. Things like that. I needed to get
1:17.6	done. Soon after Harston took out that second mortgage, the financial crisis of 2008 happened.
1:26.8	Banks were getting bailed out. Home prices were crashing. And a lot of people, like Harston,
1:32.1	lost their jobs. Many stopped making payments on their home loans. Some banks stopped sending out
1:37.9	statements for those loans. Giving people the impression their loans had been cancelled.
1:42.9	Harston was one of them. I thought it was over. And then I got this surprise letter in exactly
1:52.4	three years ago this month. Since then, Harston has been embroiled in a legal fight to keep his home.
1:59.6	A fight that other homeowners across the country are also going through.
2:07.1	Welcome to the journal, our show about money, business, and power. I'm Jessica Mendoza. It's Friday,
2:13.7	June 23rd.
2:20.1	Coming up on the show, how zombie mortgages are coming back to stock American homeowners.
2:29.2	The financial crisis was a chaotic time for the housing market. Home prices were falling. People
2:47.6	were losing their jobs, struggling to pay their mortgages. And that led to a wave of foreclosures.
	...

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